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Regional Economic Integration - Coggle Diagram
Regional Economic Integration
Regional economic integration is the process whereby countries of a region operating to reduce or eliminate barriers to the international flow of products, people, or capital
Five Key EU Institutions
European Commission
It is the
executive body
of the EU. Implementing EU law and monitoring member states to ensure they are complying with EU laws.
Council of the European Union
Legislative body of the EU. It is the
ultimate controlling authority
. No proposed legislation becomes EU law unless the Council votes it.
Court of Auditors
Audit EU accounts
,
implement EU budget
, improve EU financial management, and report to citizens on the use of public funds.
Court of Justice
EU
court of appeals
. One type of case heard is when a member nations is accused of not meeting its treaty obligations. Justices are required to act in the interest of the EU as a whole.
European Parliament
Debates legislation
proposed by the Council. It acts as a consultative rather than a legislative body.
Five Levels of Regional Integration
Common Market
Remove barriers to
trade, labor, and capital
among members, and set a common trade policy against nonmembers
Economic Union
Remove barriers to trade, labor, and capital, set a common trade policy against non members, and
coordinate members' economic policies
Customs Union
Remove barriers to trade among members, and set a
common trade policy against nonmembers
Political Union
coordinate
aspects of members' economic and
political systems
Free-Trade Area
Remove barriers to trade among members, but each country has
own policies for nonmembers
Benefits of Regional Integration
Greater Consensus
Another potential benefits is
easier to gain consensus on trade issues
as opposed to working in the far larger WTO.
Political Consideration
Trade Creation
Elimination of tariff among member countries
increase trade
. Buyers can
acquire goods and service more cheaply
and have
a wider selection
.
Employment Opportunities
Regional integration can
expand employment
by enabling people to move from country to another country for work
Drawbacks of Regional Integration
Shifts in Employment
Industries requiring unskilled labor shift to less developed member nations. More developed member nations will attract skilled workers that can increase competitiveness.
Loss of National Sovereignty
Successive levels of integration require nations to surrender more sovereignty
Example: political union requires nations to give up a high degree of sovereignty in foreign policy
Trade Diversion
Trade being diverted from a more efficient non-member nation to less efficient member nation because of the lower tariffs charged between member nations.